Change #1: CPP
A number of changes will soon be coming to a neighbourhood near you, including a significant change to the Canadian Pension Plan. For those who aren't quite sure, the Canadian Pension Plan, or CPP, is a form of social insurance that all Canadians pay into via their paycheques so that once they retire they can receive an allowance of sorts to partially sustain themselves. However, there has been much talk and anxiety surrounding the CPP in recent years as older Canadians begin to outnumber the younger generations which could result in an underfunded program. Further concerns have also been raised about the need to increase the benefit amounts in order to sustain increasing costs retirees face. Despite numerous calls for change by provincial leaders, all previous suggestions of nation-wide reform were shut down by former Prime Minister Stephen Harper who insisted Canadians and small businesses could not afford to pay more taxes. Skip ahead a few years to 2016 and we now have a Liberal government that ran on a campaign promise of enhancing the CPP and is now clearly following through.
Last Monday, federal Finance Minister Bill Morneau came to an agreement with 8 of the 10 provinces on a new framework that would ultimately increase the amount of CPP contributions made by employers and employees. This means you will be paying more into the CPP on your paycheque (up 1% from 4.95% to 5.95%). Likewise, the new plan also calls for an increase in benefits received from the pension plan from the current 25% to 33.33%. Since all but 2 provinces (Quebec and Manitoba) agreed to the new framework, it's very likely that the changes in the agreement will be implemented successfully unless more provinces back out in the coming weeks. According to the CPP Act, only two thirds of the provinces and population must be in agreeance in order for new rules to be passed. The new higher premiums and benefits will be implemented in phases starting in 2018 and be fully in effect by 2024. This means that current retirees will not benefit from the changes but rather those that are currently working or soon to be entering the workforce will see the greatest benefits.
It's very likely that you will soon see more money taken off your paycheque BUT will also receive more money after retirement.
Change #2: National Energy Approvals
The Trudeau Government has proposed that two committees made up on Liberal cabinet ministers examine the process of how natural resource projects are approved or rejected. The move comes as no surprise since Trudeau had campaigned on reviewing the regulatory process during the last election. Meanwhile, the government has also arranged for two separate expert panels to look into how both the National Energy Board and the federal environmental assessment process approves energy projects. According to Trudeau, the reviews are aimed at "modernizing" the processes in place and to restore confidence among Canadians in the overall review process.
Change #3: 'O Canada
The House of Commons has officially voted to change the Canadian national anthem to make it gender neutral. Bill C-210 passed the third and final reading in the House of Commons with an overwhelming vote of 225 MP's in favor and just 74 opposed. The bill has now been sent to the Senate which will review the proposal to change the second line of 'O Canada from "in all thy sons command" to "in all of us command." However, despite being approved by the Members of Parliament, the Senate is currently on summer break and so the change will likely not come into effect until the fall.
Change #4: Vancouver Vacancy Tax
Finally, if you live in the Vancouver area, or rather don't live in the area but still own property, more changes could be coming your way. Vancouver Mayor Gregor Robertson has announced that he wishes to implement a tax on vacant homes in an effort to slow increasing housing prices and extremely low rental vacancy rates. A recent review of BC Hydro records has indicated that close to 11,000 homes in Vancouver are potentially sitting empty and are contributing to the housing crisis. Robertson has requested the assistance of the province in determining which homes are empty should the new tax be approved but no official agreement has been reached. While the proposal may sound relatively straightforward, without the use of BC assessment records it is highly unlikely that the city would be able to determine who has a vacant property and should be paying the new tax.